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SMMT boss: Digital radio key to remarketing's future

Date:
23 February 2012
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Author: Jack Carfrae

"There are a lot of fleets for which some ultra-low-carbon vehicles are a good fit, especially because they highlight corporate responsibility." Paul Everitt, SMMT

SMMT chief executive Paul Everitt told delegates at this month's VRA Conference that the adoption of DAB digital radios in cars will have a significant effect on the remarketing arena.

Everitt, speaking at the event held at Silverstone, highlighted that the standard fitment of such radios remained low until last year, when manufacturers began to take notice of the impending digital switchover, currently scheduled for 2015.

He also pointed out that vehicles fitted with conventional analogue radios will instantly become difficult to remarket once the switchover has taken place: "Cars that don't have digital radios that come back to market in 2015 will be difficult to sell. There is growing desire for both new and used cars to have digital radios."

He also revealed figures that showed the rise in DAB radios as standard fitment across the new car market over the past two years. These showed that only 5% of new vehicles were fitted with the devices as standard in January 2010, which rose to 20% by the end of 2011.

The availability of a digital radio as a cost option has remained largely static since the beginning of 2010 at around 30% of the market, while the proportion of vehicles that do not offer digital radios at all has dropped from 63% to 53% over the same period.

Everitt also said that the SMMT expects fleet business to remain the bedrock of the UK car sales in 2012, following a fall of 14.1% in private sector car sales in 2011: "The fleet and business sector is going to remain pretty stable at around 1.1 million units. As for retail, we're at a weak level - we haven't seen it at this level since the early 1990s."

He claimed that premium cars were performing better than Budget and volume models and that LCVs are also seeing strong results, despite the commercial vehicle scrappage scheme failing to gain much traction. Delegates were shown the SMMT's figures, which revealed a rise of 16.7% in new LCV sales in 2011.

Speaking to BusinessCar after the presentation, Everitt said fleet operators may be keener to defleet their vehicles after the traditional three years of service than is widely believed, despite the theory that many seek to leave vehicles in service for longer to achieve better value: "Fleet operators are often keep to defleet after three years rather than hang on to cars for longer because they reap the benefits of stronger residuals and better prices."